Birmingham most improved city in PwC’s Good Growth for Cities index 2017

  • Cities in the Midlands including; Birmingham in first place, Leicester, Wolverhampton & Walsall and Derby are amongst fastest improving cities this year
  • Strongly improving performance from new Metro mayor cities; Birmingham, Middlesbrough and Liverpool
  • But the price of success is reduced housing affordability and increased average commuting times
  • Critical need for local industrial strategies that address housing, transport and skills gaps

Cities in the Midlands are seeing strong jobs growth and are catching up on the historic top-performers in the South of England, according to the latest Demos-PwC Good Growth for Cities Index.  

While the highest ranked cities still tend to be mostly in the South of England, except for Edinburgh, the top 10 improvers in the 2017 index include Birmingham, Leicester, Wolverhampton & Walsall and Derby, suggesting that the Midlands is steadily narrowing the gap. Only London and Southampton from the South are among the top 10 improvers relative to last year’s index.

John Hawksworth, Chief Economist at PwC, commented that:

“The UK has been a great job-creating machine in recent years and this has driven improvement in our good growth index this year across all major UK cities. On average across the UK, the index is now at its highest level since it began in 2006 and all regions have benefited from this upturn.

“But there has also been a price to pay for this in terms of worsening housing affordability, increased average commuting times and more people having to work long hours. The cities that are highest ranked on the index also tend to suffer the highest price of success.”

Published today [8 November 2017] the sixth annual Good Growth for Cities 2017 index sets out to show that there’s more to life, work and general wellbeing than GDP. The index measures the performance of 42 of the UK’s largest cities, England’s Local Enterprise Partnerships (LEPs) and the new Combined Authorities against a basket of ten indicators based on the views of the public as to what is key to economic success and wellbeing.

These include employment, health, income and skills – the most important factors, as judged by the public – while housing affordability, commuting times, environmental factors and income inequality are also included, as is the number of new business starts.

Birmingham reached the top spot for most improved city, performing above average on new businesses per head, jobs, health transport and environment, while Leicester, Coventry, Wolverhampton and Walsall also enter the top 10 of the index.

The top 10 highest ranked cities, and the most improved since last year were:

  Highest ranking cities (2017 index) Top 10 improvers since last year
1 Oxford Birmingham
2 Reading Leeds
3 Southampton Leicester
4 Edinburgh Newcastle
5 Bristol Southampton
6 Milton Keynes London
7 Cambridge Middlesbrough & Stockton
8 Coventry Wolverhampton & Walsall
9 Leicester Liverpool
10 Swindon Derby

Source: PwC analysis

The index shows that all 42 UK cities improved their score relative to our 2016 Index, driven primarily by increasing employment. In general, those cities that have seen the biggest improvements in their overall score have also experienced particularly large falls in unemployment in recent years.

Growth comes at a price (regions – see page 16 / Fig 6)

However, while all 42 cities have improved their year-on-year scores in the 2017 index, success comes at a price. A reduction in housing affordability, falling owner occupation rates, rising average commuter times, and minor declines in both health and work-life balance since last year’s report suggest pressure on scarce resources such as housing, transport and labour during the recent period of economic recovery between 2013 and 2016.  

Matthew Hammond, PwC’s Midlands Regional Chairman and Birmingham Office Senior Partner, commented:

“Delivering good growth cannot be achieved by any one person working alone, but goes hand-in-hand with place based transformation, where local government, central government and the private sector act together and work collaboratively, to facilitate local economic growth, prosperity and wellbeing. There is strong evidence that devolution is creating conditions for what appear to be quick wins, but are in fact long-term growth opportunities.”

Strong performance by Metro Mayor Cities (see page 18/Table3 /Fig 8)

Our analysis of English Combined Authorities shows a strong performance in metro mayor cities. Three of the six newly elected mayors were elected into regions containing cities in the top 10 improvers in our index: Birmingham, Middlesbrough and Liverpool.

While the election of mayors per se had no direct bearing on the index scores outcomes, the devolution process which created the cities and combined authorities has been a work-in-progress for a number of years and this has already had a positive effect on local performance and so the good growth index scores for these cities.

Good Growth scores in England’s LEP areas (see page 22 Fig 11, 12 & 13)

Matthew Hammond, commenting on the overall theme of this year’s Index results, said:

“We’ve seen broad-based improvements in our good growth index across the Midlands, driven in particular by falling unemployment rates. Some areas that had lagged behind in the recovery from the financial crisis are now showing clear improvements, so the recovery and some early signs of economic re-balancing are spreading across the UK and particularly in the same areas of the Midlands.”

“However, we are also seeing the price of prosperity in terms of growing pressures on scarce resources of housing, transport and skills. If regional cities are to sustain the strong recovery and performance of recent years, it will be critical to address these challenges as part of cities’ growth strategies. Key national and regional infrastructure projects combined with private sector development, such as HS2, will add momentum to the Midlands for the next decade.”

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